Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is now neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The main U.S. stock market indexes were mixed between -0.2% and +0.1% on Friday, extending their short-term uncertainty, as investors reacted to some mixed economic data announcements. The S&P 500 index continues to trade close to its last Thursday's all-time high of 2,188.45. The nearest important level of support is at around 2,170, marked by short-term local lows. The next support level  remains at 2,150. On the other hand, resistance level is at around 2,190, marked by all-time high. The next potential resistance level is at 2,200. Will the market continue higher? Or is this some kind of a topping pattern before downward reversal? There have been no confirmed negative signals so far:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.2%. The main European stock market indexes have gained 0.1-0.4% so far. Investors will now wait for some important economic data announcements: Empire Manufacturing number, NAHB Housing Market Index at 8:30 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it extends its Friday's move up. The nearest important level of resistance is at around 2,185, marked by short-term local high. On the other hand, support level remains at 2,170-2,175, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades close to new all-time high. The nearest important level of support is at around 4,790-4,800. There have been no confirmed negative signals so far. However, we can see overbought conditions accompanied by negative technical divergences:

Concluding, the broad stock market remains within a short-term uptrend, as the S&P 500 index trades close to new all-time high. We still can see technical overbought conditions accompanied by bearish divergences. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

Paul Rejczak
Stock Trading Strategist
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